Tua wins round in cash dispute

By PHIL TAYLOR

A High Court judge has ruled that a caveat David Tua has had placed, preventing the sale of the home belonging to the wife of an ex-manager, must stay in place until the main dispute between the boxer and his former managers is heard.

Dismissing an application to knock out Tua's caveat on the $5.5 million Takapuna property, Justice Geoffrey Venning said money belonging to the boxer had been mixed with the funds of his management company, Tuaman Inc, and money from this mixed pool was then applied by his former manager, Martin Pugh, towards renovations and reducing debt on the O'Neills Ave, home.

Justice Venning made it a condition that the boxer begin separate proceedings against the trustees of Baron and Lunar Trust or include them in existing proceedings, so they can be heard by the court on the claim against the trust's property.

Baron and Lunar Trust owns the O'Neills Ave property. It is the family trust of Sally Cross, the mother of Pugh's son.

Tua has told the court he believes he has a claim of up to $3 million on the property, which has been under renovation since May 1998.

Pugh was project manager of this redevelopment and a building project on the Mangere home of Tua's parents.

Pugh and Kevin Barry have been in dispute with Tua since last July when he sacked them as his managers.

Justice Venning said in his ruling that Tuaman Inc and Pugh had a fiduciary duty to Tua.

The company and Pugh breached that duty by not accounting for the boxer's money held within the company and by "then taking the next step and using his money, by mixing it with his own".

Tuaman Inc had an obligation to complete reasonable financial records and failed to do so, the judge said.

"It is significant that while a 50 per cent shareholder, David Tua was not in control of the company. Martin Pugh was. Martin Pugh was finance director. The evidence is that Martin Pugh controlled Tuaman Inc's finances and accounting."

Tua claims an interest in $809,000 which passed through Sports Tech, a Vanuatu-registered company operated by Pugh, to Cross' family trust and was then paid to clear business debt of $808,817.79.

Pugh and Ms Cross said the money was a bond in exchange for Baron and Lunar Trust guaranteeing loans taken out by Tuaman Inc.

Tua claimed it was "a sham" arrangement.

Justice Venning said in his judgment it was "notable" that Ms Cross had not produced the bond agreement.

"The evidence regarding the bond is unsatisfactory. The coincidence between the bond payment and Ms Cross' indebtedness to ASB Bank at the time is remarkable.

"There was no logical reason for Tuaman Inc to enter the bond transaction at the time."

At the court's direction, accounts covering the past five years have been prepared. These were done in three versions.

Version two was done on the basis that David Tua and not Tuaman Inc owned a large block of Pakiri coastal land and the city apartment in which he lives. On this version Tua owes Tuaman Inc $3.587 million.

On the other two versions, in which Tuaman Inc is treated as owner of the properties, the company owes Tua $1.731 million.

Pugh and Barry are shown as owing Tuaman Inc money in all three versions.

Justice Venning said: "It is for the court to ultimately decide which of the versions it accepts as correct. That can only be done at a substantive hearing."